SAN FRANCISCO—Uber's love for arbitration is well-known, and it has sought to move its disputes with drivers into that more private forum. Now the question is, will it be able to steer a case as big as the Waymo litigation in the same way?

Waymo, Google's self-driving car division, sued Uber in February, claiming that Uber engineer Anthony Levandowski stole thousands of files that were trade secrets. Now Uber is seeking to move most of the case out of court and into arbitration. Waymo, in turn, wants to keep the whole case in federal court.

Further Reading

Uber filed a motion (PDF) to compel arbitration in March, but most of the courtroom action so far has been about Levandowski himself. Levandowski, who is not a defendant in the case, has declined to answer questions about the allegedly stolen files. He has cited his Fifth Amendment right to avoid self-incrimination.

“They are trying to game this”

Today, the arbitration issue came up front and center. Waymo lawyer Charles Verhoeven told US District Judge William Alsup his client would be willing to litigate the case without relying on any Levandowski employment agreement, which could contain an arbitration clause. He said he wouldn't bring any such agreement up in the case, as long as Uber didn't open the door by referencing the agreements itself.

"The moment will come when you have to prove these files are trade secrets," said Alsup. "One of the things you look at is, did your company have security measures to safeguard the confidentiality of the information? To which you would normally say, well, we made him sign an agreement to keep it confidential."

Further Reading

"We have plenty of other evidence to support that standard," said Verhoeven.

"Waymo doesn’t get to pretend these contracts don't exist in order to avoid arbitration," said Uber's attorney, Hamish Hume. "Waymo chose to have a contract, that talks about information, about inventions, and about who owns what."

Verhoeven sought to reassure the judge that leaving Levandowski out of the case wasn't a ploy to avoid arbitration. He promised that Waymo wouldn't sue Levandowski over the same claims they had brought against Uber—although Waymo stopped short of making a blanket disclaimer that they'd never pursue Levandowski, because they don't know the details of what he has done.

"You have a competitor of Waymo attempting to escape the district court by citing to an agreement it had nothing to do with," said Verhoeven. "Our claims do not depend on any reference to this agreement at all."

"They are clearly trying to game this," said Hume. "The agreement says 'any dispute' about the relationship goes to arbitration. If Levandowski had a problem [with Google], it would be arbitrated. They want to come to court against Uber. But Uber hired Mr. Levandowski and hired the companies he created."

"We’re suing a third-party competitor [Uber], who we didn't have any agreement with," said Verhoeven.

In addition to trade secret claims, Waymo's lawsuit claims that Uber is violating certain patents relating to self-driving car technology. Those patent claims aren't subject to arbitration and will remain in court no matter what.

US District Judge William Alsup didn't indicate how he'll rule or when. The attorneys are answering additional questions in writing.

Next week, Alsup will consider Waymo's request for a preliminary injunction that would prevent Levandowski from working on Uber's self-driving car project. If granted, such an injunction could be a major blow to Uber, which is relying on advances in self-driving car tech to ultimately become profitable.

More on Waymo v. Uber:

On February 23, Google's Waymo division filed a lawsuit claiming that Uber's self-driving car chief, Anthony Levandowski, illegally downloaded 14,000 files when he worked at Google.

On March 29, during a closed-door hearing, Levandowski's lawyer said his client would plead the Fifth to avoid testifying about documents that he may have.

On April 3, Google accused Levandowski of creating "competing side businesses," even while he earned a reported $120 million from Google.

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"Waymo doesn’t get to pretend these contracts don't exist in order to avoid arbitration," said Uber's attorney. "Waymo chose to have a contract, that talks about information, about inventions, and about who owns what."

OK, so if Uber is claiming that a contract between Levandowski and Waymo impacts the case between Waymo and Uber, don't they have to admit that Uber has the documents? If Uber doesn't have any of the documents then the arbitration over who owns what is completely moot.

It's no secret that many of these cases rapidly become all-out games of legal dodgeball and that the evidence that eventually makes it into court is less a record and more a huge punchcard. Since it looks like Uber has now admitted (at least to themselves) that they're severely on the back foot without Levandowski's 5th amendment claims, a venue shift might be the best they can hope for to minimize the PR black eye.

I generally hope that Alsup rules to let this have its day in court, because I don't know what it will take for something to *stick* to a company like Uber otherwise.

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them? Waymo never intended to agree to arbitration with Uber over anything. The fact that an employee signed an employment agreement means you have an arbitration agreement with that employee. This really screws with my understanding of contract law, and means every broad arbitration clause in every agreement is now a potential nightmare.

Uber wants to push arbitration because the employee, Levandowski, likely had an arbitration clause with Waymo in their employment agreement? I wasn't aware that Uber could push arbitration on behalf of someone else, someone who isn't an immediate party to this case.

If Waymo sticks to their word then arbitration is likely off the table, but they need to know what Levandowski acquired during his time with the company if they want to build their case against Uber.

Definitely an interesting situation. Uber's attempt at arbitration still kind of baffles me.

It's no secret that many of these cases rapidly become all-out games of legal dodgeball and that the evidence that eventually makes it into court is less a record and more a huge punchcard. Since it looks like Uber has now admitted (at least to themselves) that they're severely on the back foot without Levandowski's 5th amendment claims, a venue shift might be the best they can hope for to minimize the PR black eye.

I generally hope that Alsup rules to let this have its day in court, because I don't know what it will take for something to *stick* to a company like Uber otherwise.

PR black eye? If they get caught with their hands in the pot here it's going to be a far larger black eye than just a PR one.

Next week, Alsup will consider Waymo's request for a permanent injunction that would prevent Levandowski from working on Uber's self-driving car project. If granted, such an injunction could be a major blow to Uber, which is relying on advances in self-driving car tech to ultimately become profitable.

Please take note that it is EXTREMELY HARD, NO REALLY ALLOW ME TO EMPHASIZE, EXTREMELY HARD IN CALIFORNIA to get any form of injunction that restrains an individual from practicing their chosen occupation. If Judge Alsup does grant such an injunction, expect it to be time-limited, but nevertheless a very strong BAD signal for Uber and especially Levandowski.

Next week, Alsup will consider Waymo's request for a permanent injunction that would prevent Levandowski from working on Uber's self-driving car project. If granted, such an injunction could be a major blow to Uber, which is relying on advances in self-driving car tech to ultimately become profitable.

Please take note that it is EXTREMELY HARD, NO REALLY ALLOW ME TO EMPHASIZE, EXTREMELY HARD IN CALIFORNIA to get any form of injunction that restrains an individual from practicing their chosen occupation. If Judge Alsup does grant such an injunction, expect it to be time-limited, but nevertheless a very strong BAD signal for Uber and especially Levandowski.

This is also a very extraordinary case. I'm sure if it passes the "go to jail" test - and it might, if the allegations can be proven - it also passes the "no profiting off stolen designs" test.

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them? Waymo never intended to agree to arbitration with Uber over anything. The fact that an employee signed an employment agreement means you have an arbitration agreement with that employee. This really screws with my understanding of contract law, and means every broad arbitration clause in every agreement is now a potential nightmare.

Yeah, you're not crazy. I haven't read the briefs so I don't know exactly what legal loopholes Uber is trying to jump through to make this legal theory work, but to me, their position screams, "That can't possibly be right."

Then again, I've learned to never write-off the possibility of absurd decisions with onerous and/or unenforceable results coming out of the courts.

Kind of an odd moniker. Even if it's not the guy sitting behind the steering wheel, something is driving the car. And by the looks of the car's orientation in the opposite lane, he/it is a horrible driver. /s

So, Waymo (Google) feeling wronged wants to sue in court. Uber, the accused company, wants to force arbitration. Food for thought on companies trying to preemptively remove you right to sue in favor of arbitration?

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them?

I think the point is that, absent the violation of the employment agreement, it's not at all clear what would be illegal in any of this. I don't think anyone is claiming that Uber itself broke into Waymo's labs and stole stuff, just that they are (possibly someday) profiting off of Levandowski allegedly violating his confidentiality agreement by taking trade secrets with him. What other violation would there be here?

Kind of an odd moniker. Even if it's not the guy sitting behind the steering wheel, something is driving the car. And by the looks of the car's orientation in the opposite lane, he/it is a horrible driver. /s

It was a weirdly worded caption, I fixed it. Thanks.

The Getty images come with these massively detailed captions that often need to be pared down. I'm not perfect at it.

Alsup is dedicated to open courts, much more than the average judge, and I would guess that as a person it's likely he disfavors arbitration. Having said that, he was totally open to hearing out Uber on this issue and gave no indication of how he would rule.

There was an interesting point where he said something along the lines of how it could be considered "poetic justice"—I didn't get the exact quote—for companies like Google to have their disputes moved into arbitration against their will. Since, you know, that's what they do to all their employees.

But when corporations feel they've been wronged, when they want compensation, when they want to yell their grievances in public? You'd better bet it's time for a big battle in US District Court.

Next week, Alsup will consider Waymo's request for a permanent injunction that would prevent Levandowski from working on Uber's self-driving car project. If granted, such an injunction could be a major blow to Uber, which is relying on advances in self-driving car tech to ultimately become profitable.

Please take note that it is EXTREMELY HARD, NO REALLY ALLOW ME TO EMPHASIZE, EXTREMELY HARD IN CALIFORNIA to get any form of injunction that restrains an individual from practicing their chosen occupation. If Judge Alsup does grant such an injunction, expect it to be time-limited, but nevertheless a very strong BAD signal for Uber and especially Levandowski.

I think you're overstating this a bit. It's true that it is really, extremely hard to contract away your right to practice your chosen profession in California, but it's less hard to be barred from certain employment-related activities because of of a violation of federal law. This isn't a situation where Levandowski would be enjoined from working for Uber because of a non-compete clause, but rather one where Levandowski's illegal behavior taints anything Uber would do with him in this space.

In other words, this isn't former Walgreens pharmacist barred from working at CVS, it's former-wallgreens pharmacist who made record sales by filling obviously fraudulent prescriptions for teenagers barred from working at CVS as pharmacist.

Although I agree that any injunction is likely to be time-limited, but I wouldn't be surprised if time limits are revisisted at the conclusion of this trial.

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them?

I think the point is that, absent the violation of the employment agreement, it's not at all clear what would be illegal in any of this. I don't think anyone is claiming that Uber itself broke into Waymo's labs and stole stuff, just that they are (possibly someday) profiting off of Levandowski allegedly violating his confidentiality agreement by taking trade secrets with him. What other violation would there be here?

Right, but Waymo isn't trying to adjudicate against Levandowski. Even if the employment agreement is a topic of the suit, it's a suit between Waymo and Uber. Uber isn't entitled to arbitration because it's not a beneficiary of the employment agreement. Any dispute over what Uber did may involve discussing and even interpreting the employment agreement, but that interpretation wouldn't be binding on Levandowski.

If Waymo went after Levandowski later, Waymo couldn't just say, Uber lost and you're in the same position as them so you lose, haha! Levandowski is entitled to his own case, and that case wouldn't be obligated to have the same result as this one, no matter what happens here. Levandowski is a separate party and is entitled to his own defense, and to invoke his own rights.

Let's put it differently:

1) A wants B's property, so A steals it.

2) A wants B's property, but won't steal it. However, C goes to work for B, signs an employment agreement with B, and then steals B's property. A learns that C now has B's property, and buys it from C.

How are #1 and #2 different? In both cases, A and B never had a contract. They never negotiated or agreed on how they would resolve disputes between them. In both cases, if A has B's stolen property, B is entitled to get it back. The only difference is that the property went to C first, before it went to A. But when B and C signed an agreement, B didn't think it was limiting its rights against A, only against C. B didn't know that A and C were going to work together. A and C didn't even have a relationship yet. If A can use C's contract to stay out of court, then you've basically given A an incentive to buy stolen property, because now it can buy stolen property and the benefit of C's employment contract at the same time.

The correct response here should be, Waymo can go forward against Uber as long as Levandowski isn't a party, and while they can go after Levandowski separately later, that case goes to arbitration. Even if the court here rules that Uber stole trade secrets, that wouldn't be binding on Levandowski since he's not a party. The arbitrator would still be free to reach their own conclusion.

One thing I'll note, before someone tries to beat me with it: A corporation can buy another corporation and buy the benefit of its contracts in the process. But Uber bought Otto, it didn't buy Levandowski, and Google's contract was with Levandowski. There is no reason that Google could've expected Uber to "buy" Levandowski and absorb all of his assets and liabilities, the Thirteenth Amendment kind of forbids that.

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them? Waymo never intended to agree to arbitration with Uber over anything. The fact that an employee signed an employment agreement means you have an arbitration agreement with that employee. This really screws with my understanding of contract law, and means every broad arbitration clause in every agreement is now a potential nightmare.

It looks like a continuation of Uber's earlier argument where they were saying turning over the list of documents would violate Levandowski's 5th amendment rights. They seem to be trying to make a greater than normal legal connection between them but IANAL.

One thing I'll note, before someone tries to beat me with it: A corporation can buy another corporation and buy the benefit of its contracts in the process. But Uber bought Otto, it didn't buy Levandowski, and Google's contract was with Levandowski. There is no reason that Google could've expected Uber to "buy" Levandowski and absorb all of his assets and liabilities, the Thirteenth Amendment kind of forbids that.

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On that note I wouldn't be the slightest bit surprised if the way this dispute goes away is that litigation risk seriously decreases Uber's valuation and all the sudden it's a good "investment opportunity" for alphabet. I'd experience some shadenfreude for Levandowski if that happens, but for the fact that he convinced Uber to put $680 million in his (and his investors) bank accounts already - so it's still just shaden.

Alhough with all the press about Uber's disfunctional culture, all the adwords in the world might not buy enough bleach to clean that house.

One thing I'll note, before someone tries to beat me with it: A corporation can buy another corporation and buy the benefit of its contracts in the process. But Uber bought Otto, it didn't buy Levandowski, and Google's contract was with Levandowski. There is no reason that Google could've expected Uber to "buy" Levandowski and absorb all of his assets and liabilities, the Thirteenth Amendment kind of forbids that.

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On that note I wouldn't be the slightest bit surprised if the way this dispute goes away is that litigation risk seriously decreases Uber's valuation and all the sudden it's a good "investment opportunity" for alphabet. I'd experience some shadenfreude for Levandowski if that happens, but for the fact that he convinced Uber to put $680 million in his (and his investors) bank accounts already - so it's still just shaden.

Alhough with all the press about Uber's disfunctional culture, all the adwords in the world might not buy enough bleach to clean that house.

Your last sentence is what I was thinking while reading the first part. Google wouldn't touch Uber with a 10-foot pole right now. If they think Uber is this cavalier about buying up stolen IP, they must see how toxic it is, and they wouldn't want to assume any of that risk at all.

I truly believe Google is going in for the kill here. They sound righteously pissed, and I don't blame them. Even if they can't kill Uber outright with this case, they sure could cripple it, and Uber's only survived this long by seeming invincible.

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them? Waymo never intended to agree to arbitration with Uber over anything. The fact that an employee signed an employment agreement means you have an arbitration agreement with that employee. This really screws with my understanding of contract law, and means every broad arbitration clause in every agreement is now a potential nightmare.

Yeah, you're not crazy. I haven't read the briefs so I don't know exactly what legal loopholes Uber is trying to jump through to make this legal theory work, but to me, their position screams, "That can't possibly be right."

Then again, I've learned to never write-off the possibility of absurd decisions with onerous and/or unenforceable results coming out of the courts.

I hope William Alsup tells them to go kick water uphill. Arbitration as it stands is a pox upon the US legal landscape, Uber's history of bullshit and the extremely suspicious details of Uber's behavior, and William Alsup going to town on Uber do not deserve to be hidden.

I hope William Alsup tells them to go kick water uphill. Arbitration as it stands is a pox upon the US legal landscape, Uber's history of bullshit and the extremely suspicious details of Uber's behavior, and William Alsup going to town on Uber do not deserve to be hidden.

The problem is, judges can't do squat about arbitration. It's federal statutory law that arbitration clauses are enforceable. The best you could hope for is the Supreme Court overturning some of the case that said arbitration clauses can bar class action, but now with Gorsuch on the court, that's not happening anytime soon.

"Waymo doesn’t get to pretend these contracts don't exist in order to avoid arbitration," said Uber's attorney, Hamish Hume. "Waymo chose to have a contract, that talks about information, about inventions, and about who owns what."

I wonder if Hume really wants to go that route. The only way he can assert with confidence that a contract with that particular type of content ever existed is if he got that information from Anthony Levandowski.

...If A can use C's contract to stay out of court, then you've basically given A an incentive to buy stolen property, because now it can buy stolen property and the benefit of C's employment contract at the same time.

Which would suggest that there is some downside to B writing a contract that mandates C go to arbitration, so maybe B, and all other firms (including A!), should think twice about doing it in the future. This is the point that Alsup makes (in Joe's comment above) – B wants to have their cake and eat it too.

Regardless, it's still unclear to me how Waymo could make a compelling case without referencing employee confidentiality agreements (the Waymo attorney's claim at the beginning of the article). Without those agreements, it's unclear what violation there was at all.

...If A can use C's contract to stay out of court, then you've basically given A an incentive to buy stolen property, because now it can buy stolen property and the benefit of C's employment contract at the same time.

Which would suggest that there is some downside to B writing a contract that mandates C go to arbitration, so maybe B, and all other firms (including A!), should think twice about doing it in the future. This is the point that Alsup makes (in Joe's comment above) – B wants to have their cake and eat it too.

Regardless, it's still unclear to me how Waymo could make a compelling case without referencing employee confidentiality agreements (the Waymo attorney's claim at the beginning of the article). Without those agreements, it's unclear what violation there was at all.

If Waymo had a file management/monitoring system (as it clearly did since it knows what files Levandowski took), it seems a pretty straight-forward argument that the documents were being monitored because they are trade secrets. Any layers of security on top of that would also lend strength to the argument.

However, even if Waymo does have to resort to referencing the employment agreement, it still seems a stretch for Uber to claim that Levandowski's employment agreement with Waymo, something Uber was never part of, is enforceable on Uber's behalf. Remember, Waymo is suing Uber, not Levandowski.

Uber wants to push arbitration because the employee, Levandowski, likely had an arbitration clause with Waymo in their employment agreement? I wasn't aware that Uber could push arbitration on behalf of someone else, someone who isn't an immediate party to this case.

If Waymo sticks to their word then arbitration is likely off the table, but they need to know what Levandowski acquired during his time with the company if they want to build their case against Uber.

Definitely an interesting situation. Uber's attempt at arbitration still kind of baffles me.

I think the fact that arbitration isn't part of the public record is likely the biggest motivating factor here - assuming, of course, that if the motion is granted it's up to the COURTS to decide who will be the arbitrator.

Usually, choosing the arbitrator is the the privilege of those mandating or asking for arbitration, thus providing a gigantic bias on the part of the arbitrator to find for the side paying for their services because they want to get more business from them. Hence why arbitration is a broken way of managing civil disputes.

Of course, it could be that Uber wants to pick the arbitrator since it's the one demanding arbitration in the first place, but I'm reasonably confident, assuming the justice system isn't as fucked as the rest of the government is, that the courts aren't going to allow arbitration anyhow, rendering the discussion entirely moot.

Unless Uber is headed by completely delusional people (not beyond the realm of possibility!), they likely know this, so this request makes no sense to me other than a shot in the dark attempt to keep their dirty laundry from being aired in a public court.

I hope William Alsup tells them to go kick water uphill. Arbitration as it stands is a pox upon the US legal landscape, Uber's history of bullshit and the extremely suspicious details of Uber's behavior, and William Alsup going to town on Uber do not deserve to be hidden.

The problem is, judges can't do squat about arbitration. It's federal statutory law that arbitration clauses are enforceable. The best you could hope for is the Supreme Court overturning some of the case that said arbitration clauses can bar class action, but now with Gorsuch on the court, that's not happening anytime soon.

Point conceded on the business-to-business aspect; I never deal with that and mainly read about companies taking sledgehammers to people in court, drowning them in paperwork until, etc. or basically showing a legal document saying "You agreed to arbitration, we get to choose the arbiter, get ready for pain!"

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them? Waymo never intended to agree to arbitration with Uber over anything. The fact that an employee signed an employment agreement means you have an arbitration agreement with that employee. This really screws with my understanding of contract law, and means every broad arbitration clause in every agreement is now a potential nightmare.

Yeah, you're not crazy. I haven't read the briefs so I don't know exactly what legal loopholes Uber is trying to jump through to make this legal theory work, but to me, their position screams, "That can't possibly be right."

Then again, I've learned to never write-off the possibility of absurd decisions with onerous and/or unenforceable results coming out of the courts.

This is the legal equivalent of "hold my beer." Maybe it'll work out and it'll be awesome (for uber), but either way, have the camera's ready.

Thanks for the link and legwork. From that case (and lightly edited):

Quote:

Nevertheless, "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). "Because arbitration is fundamentally a matter of contract, the central or primary purpose of the FAA is to ensure that private agreements to arbitrate are enforced according to their terms." Momot v. Mastro, 652 F.3d 982, 986 (9th Cir.2011) . Generally, the contractual right to compel arbitration "may not be invoked by one who is not a party to the agreement and does not otherwise possess the right to compel arbitration." Britton v. Co-op Banking Grp., 4 F.3d 742, 744 (9th Cir.1993). Accordingly, "[t]he strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement." Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1287 (9th Cir.2009)

This being precedent from the 9th Circuit, well, that attempted legal argument really is a steep uphill drive for Uber.

...If A can use C's contract to stay out of court, then you've basically given A an incentive to buy stolen property, because now it can buy stolen property and the benefit of C's employment contract at the same time.

Which would suggest that there is some downside to B writing a contract that mandates C go to arbitration, so maybe B, and all other firms (including A!), should think twice about doing it in the future. This is the point that Alsup makes (in Joe's comment above) – B wants to have their cake and eat it too.

I have not seen the agreement, but it's highly unlikely it actually mandates that. I mean, I agree there would be a downside to writing such a contract, but that was a well known problem well before this case started--which is why I can't believe Google did such a thing.

In fact, contracts from sophisticated parties (like billion dollar tech companies) often expressly say the opposite, elsewhere in the agreement--that the agreement has no third party beneficiaries, or confers no rights on any third parties whatsoever. That statement spells out that a contract between B and C only applies to B and to C, and grants no rights to A or anyone else in the universe.

Even in the absence of such a provision, third-party beneficiary rights are not assumed by default. The party claiming the benefit must show at least an implicit intent in the contract to benefit them, which goes back to my "B never intended a contract with C to apply to A" point. It's still not clear to me why an employment agreement between Google and Levandowski would ever be intended to apply to Uber.

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them? Waymo never intended to agree to arbitration with Uber over anything. The fact that an employee signed an employment agreement means you have an arbitration agreement with that employee. This really screws with my understanding of contract law, and means every broad arbitration clause in every agreement is now a potential nightmare.

Yeah, you're not crazy. I haven't read the briefs so I don't know exactly what legal loopholes Uber is trying to jump through to make this legal theory work, but to me, their position screams, "That can't possibly be right."

Then again, I've learned to never write-off the possibility of absurd decisions with onerous and/or unenforceable results coming out of the courts.

This is the legal equivalent of "hold my beer." Maybe it'll work out and it'll be awesome (for uber), but either way, have the camera's ready.

Thanks for the link and legwork. From that case (and lightly edited):

Quote:

Nevertheless, "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). "Because arbitration is fundamentally a matter of contract, the central or primary purpose of the FAA is to ensure that private agreements to arbitrate are enforced according to their terms." Momot v. Mastro, 652 F.3d 982, 986 (9th Cir.2011) . Generally, the contractual right to compel arbitration "may not be invoked by one who is not a party to the agreement and does not otherwise possess the right to compel arbitration." Britton v. Co-op Banking Grp., 4 F.3d 742, 744 (9th Cir.1993). Accordingly, "[t]he strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement." Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1287 (9th Cir.2009)

This being precedent from the 9th Circuit, well, that attempted legal argument really is a steep uphill drive for Uber.

I agree that that's the part that really matters, but what Uber wants you to take away is this:

Quote:

Where a nonsignatory seeks to enforce an arbitration clause, the doctrine of equitable estoppel applies in two circumstances: (1) when a signatory must rely on the terms of the written agreement in asserting its claims against the nonsignatory or the claims are "intimately founded in and intertwined with" the underlying contract, and (2) when the signatory alleges substantially interdependent and concerted misconduct by the nonsignatory and another signatory and "the allegations of interdependent misconduct [are] founded in or intimately connected with the obligations of the underlying agreement." Goldman, 173 Cal. App.4th at 219, 92 Cal.Rptr.3d 534.

Ok, so it's theoretically possible for a non-signatory to compel arbitration. That's actually good for Uber. But being able to identify a theoretical right is pretty weak tea. Again, I haven't read the motion carefully, but it doesn't look like Uber has actually identified any cases where that theoretical right actually vests (the Goldman case cited also held that a third party couldn't compel arbitration...)

This is creative (read: expensive) lawyering. It's not likely to work because of the stuff you quoted, but when you hire some of the most expensive lawyers, part of what you're buying is the ability to field decent arguments on theoretical foundations. (There's good stuff in that brief about collateral estoppel! It's probably not enough, but it's a good effort.)

Usually, choosing the arbitrator is the the privilege of those mandating or asking for arbitration, thus providing a gigantic bias on the part of the arbitrator to find for the side paying for their services because they want to get more business from them. Hence why arbitration is a broken way of managing civil disputes.

In my experience this is not true. Businesses don't want to have an arbitration challenged in court as inherently unfair (courts won't touch an arbitration outcome unless it's tainted with woefully inadequate due process), so they will try to embed at least some fairness in the arbitration process.

For example, an arbitration clause will often say it will follow the published rules of a respected arbitration group such as the American Arbitration Association or JAMS, which means you'll end up mutually agreeing on a AAA or JAMS arbitrator. I don't know the AAA rules well, but JAMS has a mechanism for cases where the parties can't mutually agree on an arbitrator, that will basically assign a JAMS arbitrator who's new to the parties.

AAA, JAMS, etc. have their own reputations to uphold. If just one of their arbitrators' rulings got thrown out for blatant bias, it would destroy them, since their entire business model is literally supplying neutral arbitrators to the world. I'm not saying this system is perfect, and I personally hate and abhor arbitration clauses in consumer or employment agreements, but it's not as corrupt as you suggest.

By failing to prevent us from stealing your employee, you agree that any arbitration clauses between you and your former employee automatically extend to us.

I mean, essentially this is the argument they're making. The U.S.C. cites refer to situations where an arbitration agreement between the parties already exists, and one party is trying to sue instead... and it's pretty clear they cannot produce an arbitration agreement between Uber and Waymo or Otto and Waymo, because no such agreement exists. Only the (as yet not actually confirmed) one between Levandowski and Waymo via his employment contract might exists.

I almost feel sorry for Morrison & Foerster LLP. When Uber put them on retainer, I'm sure they didn't expect to find themselves playing defense against overwhelming evidence of guilt. But here they are, flailing wildly at every possible imaginative reading of the law they can find.

I don't get it. Uber didn't sign the employment agreement. Why should it even apply to them? Waymo never intended to agree to arbitration with Uber over anything. The fact that an employee signed an employment agreement means you have an arbitration agreement with that employee. This really screws with my understanding of contract law, and means every broad arbitration clause in every agreement is now a potential nightmare.

Uber is trying to throw their hands up and say "Documents? What documents? We dunno what you're talking about, go talk to that guy, this has no business in court, you're out of order, this whole court is out of order!"